“Purchase equities that are cheap relative to other names in the industry. Depending on the industry, this can mean low P/E, low P/B, low P/S, low P/CFO, low P/FCF, or low EV/EBITDA.”

It seems that choosing the right value metric for a specific industry would be an important piece of the analytic process.

Would you be willing to discuss the topic of how you have determined which value metrics to use for which industries and industry groups?

I agree with you about assessing future prospects for an industry. However, from a fundamental perspective, aren’t you introducing an element of timng? Theoretically at least, at the beginning of a recession, “the situation is bleak enough, and valuations are too high” for most industries. The practical element is being able to forecast a recession. Economists have a poor track record at doing that.

One group has made accurate forecasts–The Economic Cycle Research Institute (ECRI). I know you do not try to time the market, but if you could forecast a recession, isn’t that what your current post implies?